London-listed Petra Diamonds’ shareholders have voted in favour of a resolution to restructure the business and provide it with a more stable, deleveraged capital structure that will ensure the short- and long-term viability of the company.
At a special general meeting held on January 13, 95.13% of shareholders voted in favour of the resolution, which includes the reduction of the authorised share capital of the company by reducing the nominal value of all ordinary shares from 10p to 0.001p.
It also includes an increase to the authorised share capital of the company through the creation of 8.5-million ordinary shares and the authorisation for directors to allot ordinary shares up to £88 447 (being just over 8.8-million ordinary shares).
New ordinary shares pursuant to the debt-for-equity conversion were also approved.
In October last year, Petra announced that it had reached an agreement with its lenders with respect to a long-term solution for the recapitalisation of the group and that it was no longer planning to sell the company or parts of the business.
The company, which in June 2020 announced that it was considering selling the company or parts of the business, reported that it has been engaged in an extended period of discussions with its South African lender group, as well as an ad-hoc group of noteholders (AHG) regarding the recapitalisation of the group.
The restructuring will include the partial reinstatement of existing notes debt and the contribution by holders of existing notes of new funding; the conversion of notes debt into equity, which will result in the AHG holding 91% of the enlarged share capital of Petra; the restructuring of the first lien facilities provided by the South African lender group; and new governance arrangements and cash flow controls.
As a result of the in-principle agreement reached with its lenders and noteholders, and given that it had not received any offers that provide a viable alternative to the restructuring, Petra decided to not proceed with the sale of the company or its assets.
Petra expects the restructuring to be completed during the first quarter of this year.